Money, Bank Credit, and Economic Cycles - The Ludwig von Mises ...

216 Money, Bank Credit, and Economic Cycleswords, the deposits or fiduciary media generated from nothingto make the credit expansion possible):[15] x = d – d = d –dcc c cNow we factor out common factors:[16] x = d(1 – c)cThe above formula coincides with [6].In fact, when d=1,000,000 m.u. and c=0.1, in the case of amonopolistic bank, the net credit expansion would be equalto:[17] x = 1,000,000(1 – 0.1) = 9,000,000 m.u.0.1Therefore the balance sheet of Bank A, a monopolisticbank, would ultimately appear as follows:(31)Bank A(Monopolist)Balance SheetAssetsLiabilitiesCash 1,000,000 Demand depositsLoans to U 900,000 By X 1,000,000Loans to V 810,000 By A 900,000Loans to Y 729,000 By B 810,000Loans to Z 656,000 By C 729,000. . By D 656,000. . . .. . . .Total Assets 10,000,000 Total Liabilities 10,000,000